Monday Insight – November 2, 2020

Breaking! UK Bans Leisure Travel In November

Due to the China-CCP pandemic, all leisure travel out of the UK is now restricted.

This is major, and will affect some U.S. airports materially. We’ll be updating Airports:USA forecasts immediately.

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Before We Start This Week…

We are compiling data and insights from 25th International Aviation Forecast Summit and will post them shortly. But there’s a few additional updates now…

We are proud to have accomplished the first in-person live aviation forecast event since the advent of the arrival of China’s Covid “gift.” In addition, it was the most successful and insightful in our history

The IAFS was also the first conference in Cincinnati in over six months, and we are excited to note that the Summit allowed the Hyatt Regency to bring back over 40 furloughed staff.

Over the last year, there were times that we were urged from several sectors to make the IAFS entirely virtual.

No way. We knew that, properly done, live was the right thing to do – we had to be an example for the industry. And, because of the support of the presenters from across the industry and across the globe, and the wonderful attendees, that’s exactly what happened. We sold out the Covid-rated capacity of the Hyatt ballroom, and added an additional over 400 virtual attendees from around the globe, including Japan, Mexico, Israel, Dubai, and more.

Again, we want to thank all who attended in both forms.

Achieved: The Most Professional Event In Aviation. And, it’s time to thank the staff here at BGI who made this happen. It takes a lot of hard work, and dedication to innovative excellence to make the IAFS what it has become – the #1 event of its kind in the industry. Matter of fact, the only aviation forecast event.

Marian Boyd, co-founder and COO of BGI, and one of the first woman pioneers who years ago shattered the glass ceiling in airline management, long before the industry admitted it existed, is the one who has conceptulized, directed, and managed the entire IAFS from top to bottom and from beginning to end. She is responsible for not only the accomplishment of the event and the professionalism of the IAFS, but for the high regard and respect she has among aviation executives, who join us year after year.

Sonia Watts of BGI was waist-deep (and more) for the past year in assuring that the IT, web systems and information flows were examples for the industry and that any attendee issues were handled right away.

Jnge Haltinner and Kirk Moses, our partners at Travel Destination Guides, of Las Vegas, were with us again this year, making sure that all the hotel, AV and other arrangements were perfect. There are thousands of inter-related issues, factors and dynamics in putting an event like this together, and these are the professionals accomplished these challenges.

The International Aviation Forecast Summit has for the past 25 years set the standard for delivering excellence both in content and in format. And we want to thank all the aviation leaders from across the world who have joined us, supported us, and those who have sponsored the event.

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The New Indicator of Air Service Shifts…
Fundamental Airline Fleet Restructuring

As of today, all air service access planning in the USA has a new, fundamental component that will be the main driver of how and where airlines will add or reduced air service. It is one that is completely ignored in traditional analyses.

It’s called fleet mix. And every airline is in the process of re-fleeting.

It’s one major factor in the key changes that will shape future air service in America. To start with,for the foreseeable future, airline route, market and revenue strategies will be implemented based entirely on internally-generated corporate restructuring programs… it’s called survival. Part of that is re-thinking fleet capabilities.

No Growth. New Capacity Applications. There is now little disagreement that it will be 3-4 years before air traffic volume returns to the levels seen in 2019 – and that doesn’t include the organic growth we would have experienced annually in the interim.

This means that near-term and long-term planning that was in place in February is now in the round file. The traffic, which was appearing to return last summer, is now moribund due to clutzy and uneven city, state and regional reactions to the China CCP pandemic. It means that airports need to completely re-think approaches to assure air access.

It means aggressively understanding the new strategies of each airline, and crafting plans that anticipate them as closely as possible. We’ll say it again: since airline service and capacity systems are changing, it means that past traffic demand and flow data are largely obsolete.

There’s More Capacity Than The Market Demand Can Absorb. That also means airline fleets are being restructured. As of today, about one third of the @6,300 jet airliners in the U.S. airline industry are either “parked” or are materially under-utilized. Since congress is too corrupt to produce a simple support program that isn’t accessorized by billions in political pork that has nothing to do with relief from the Covid pandemic, airlines will at some point in the near future have no choice but to completely restructure to accommodate a different air transportation environment.

That gets us to new fleets… and new fleet demand criteria.

At the 25th International Aviation Forecast Summit in Cincinnati last month, Airbus, Boeing and Boyd Group International each presented its own forecasts for airliner demand over the next ten years.

All three were accomplished independently. Yet, aside from some variances in specific categories, they all were similar. The BGI forecast was within 2.5% of Boeing’s projections, for example. But they all had the same general direction: the demand is constricting into the middle – into narrow-body, single-aisle airliners. One of the drivers not the result of pandemic issues is the new generation airliners, such as the A321XLR, the E195 E2, the A220-300 and the 737Max. These platforms are far more multi-mission capable than earlier versions.

As an illustration of what airports will be facing in regard to revised airline fleets, we compared our latest CCP-Covid-related Global Fleet Trend & Demand Forecast with our prior forecast of slightly more than a year ago. The starting point is that while there is expansion expected in the latter years of the forecast period, total global demand is now seen as being more than ten percent down from what was expected a year ago:

The total fleet demand is forecast to drop for the ten year period by about 800 units. When we look at the mix of projected airliners by category and region, it indicates fundamental changes coming in the air transportation system. In the latest forecast, we compressed the airliner categories from four to three due to the mission overlap new platforms will represent.

Take a look at North America. This is where massive re-fleeting will be taking place, with 50-70 seat airliners (still mis-monikered as “regional jets”) being retired in droves and the capacity replaced by airliners in the 75-125 seat category (think Embraer E-2) and by larger new single-aisle designs by Airbus and Boeing.

The China CCP-Covid damage is expected to have the potential for major damage to some regions, particularly Latin America and – appropriately – China. These will be watched closely for changes in the coming 18 months.

Runway To The Future… Is Your Airport/Community Lined Up On It? In the meantime, we would urge airports to immediately move to re-think not only their strategic planning, but also review the effects of the new aviation realities… this brings in our incisive new program that takes our client airports into a clear view of the emerging future… It’s called Runway To The Future, and it’s tailored to the specific situation and future of the airport and region.

Airlines, as noted, are moving now to revise fleets and route systems. At BGI, we believe that this will result in new markets added at some carriers, as re-thinking of hub structures… General and executive aviation will be going in different directions from pre-Covid. Recreational flying is going to take a big hit, plus airports need to consider changes in revenue streams as electric propulsion replaces 100LL. Then there is the 5,000 pound gorilla called air cargo, which is evolving into a new logistics channel – and revenue opportunities – for airports of all sizes.

It’s going to be a new business environment… BGI has the expertise to assist airports in anticipating the challenges and opportunities it represents.

At Boyd Group International, we are not discussing another tired market study that relies on past data generated by an aviation system that’s going away. We uniquely focus on identifying and focusing on the future, and this program does exactly that for our clients.

Click here for more information and to reserve your program accomplishment.

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Monday Insight – October 19, 2020

Monday 26 October Insight – In Progress… To Be Posted Shortly!

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25th IAFS™ – The Most Successful & Productive Yet!

We want to again thank our hosts, sponsors and attendees for making this year’s International Aviation Forecast Summit one that again sets a new standard for industry events.

We will be posting pictures and summaries of key sessions shortly, and our attendees have been provided with access codes to virtual program.

In the meantime, there is a more detailed preliminary discussion of the IAFS™ on the home page.

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China – Still No Mandarin Translation of “Chutzpa”

Solid data… it’s what allows aviation professionals to make logical planning determinations, as well as ferret out where trends do or don’t make any sense.

At the International Aviation Forecast Summit, we had the great experience of Mr. Jim Ogden of Cirium outline the new importance of having reliable data, and more importantly being able to understand what they represent, instead of just taking them at face value.

One of the key parts of the IAFS Cirium Workshop were examples of schedule data. In particular, the difference between “schedule changes” and “cancellations.” The first is adjusting capacity on a pro-active advanced basis, more than one week out. The second is cutting flights close to departure date. Then there is the concept of “orphan” flights – capacity left in the schedule but not operated. Flights left in schedule but not operated.

Or, as we’ll see below, flights put back in schedule with no intention of being operated… for political eyewash.

One of the examples given was a chart of schedule capacity changes by region between the first of the year and the third quarter. This one slide was enough to prove that having solid data from Cirium is critical to professional aviation planning. It can illuminate a lot of things beyond just the numbers filed by airlines and governments across the globe.

In this case, it was a simple comparison of changes in airline capacity over the past year.

In all regions, as would be expected, the scheduled capacity went into a nose-dive in March and April. And as expected based on the economic damage done by the CCP-pandemic, in all regions – except one – the capacity has hovered at 30% to 40% of last year.

Golly gee – guess which “region” has boldly rebounded to the point that it is just about back to year 2019 levels…. the only one to do so.

Yessir, that region is China. Capacity filings by Chinese airlines – all controlled directly or indirectly by the Chinese Communist Party – imply that air travel demand has resiliently come back like a giant boomerang. And no other part of the world that has been a recipient of the virus they allowed to spread has any similar trend.

Take a look from Mr. Ogden’s IAFS presentation, regarding the levels of flights cancelled. Take a gander at the purple line. That’s China… and it purports to represent that capacity in that country is coming up roses – right back to 2019 levels. That is in contrast to every other region of the globe.

Now they wouldn’t file these data unless those seats were occupied, right? If you buy into that, call your real estate agent. That bridge in Brooklyn is for sale, again.

What is the magic causing this miraculous trend in the Middle Kingdom?

The reason is simple. They are lying. Orphan flights galore, likely… and a smattering of flights operated just to imply the market is gangbusters.

It’s what they are reporting, not necessarily what they are operating, and not necessarily any indication of traffic volume. But it sure makes great press for the gullible. Or for those who have a business dog in the China fight and are not too picky about questioning information from an unelected rogue government that has a history of publishing bogus data.

The global consulting firms and media hacks with big China operations are assuming that the data are not only accurate but are indicative of a traffic resurgence. So, too, with most of the aviation media. They are actually trumpeting that China is the example for the rest of the world.

Example it is indeed.

P.T. Barnum must be smiling broadly from wherever he may be… apparently there’s been a lot more than just one sucker born every minute.

Now, put this in context. The same sleazy government that hid the corona virus and let it infect the world, and lied about it consistently, is now to be trusted with the data they file in regard to airlines?

Sure.

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Monday Insight – October 5, 2020

IAFS Update…

We are excited to announce that Mr. Joe Esposito of Delta Air Lines will be joining us at the International Aviation Forecast Summit, October 11-13 in Cincinnati, USA.

This year’s Summit is shaping up to be the most-attended yet, with a live/virtual hybrid presentation. We have four places left on-site at the Hyatt, and virtual attendance is still has a few openings as well.

Click here to see the agenda – no other event delivers anywhere near the content and insight.This is first – and only – aviation forecast conference since the advent of the CCP-Covid pandemic – data and perspectives that cut to the reality of the future

Log on and join us!

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Getting Geared For A New Transportation System

Two Thousand, Two-hundred and Sixty-six.

That’s 2,266 airplanes to be exact. It’s the difference in the number of jet airliners that were in service in North America (approximately 6,620) on February 1, 2020 and the number reported as in service as of August 30, 2020.

That is a lot of cold iron… plus the units that are back in service likely are seeing low utilization. Based on Airports:USA forecasts of traffic re-bound, it is entirely likely that the fleet won’t again get to the 6,620 level until the end of 2022.

These are some of the findings in the 2021-2030 Boyd Group International Global Fleet Trend & Demand Forecast, which will be presented at the IAFS next week, along with forecasts from Boeing, Airbus and Embraer.

Changes In Mission Applications Driving Fleet Restructuring. It’s not just the number of airliners, but the major changes in fleet mix. With the major decline in international demand, there will be what looks like a long-haul fleet dichotomy. Airlines will be tapping into new ultra-long haul markets to developing regions such as Africa and India, due to a major decline in “traditional” demand, such as trans-Atlantic. Point: ultra long range airliners will tend to supplant some in the fleets with lesser range.

As for domestic service – we are already seeing the effects – metro-peripheral airports will see less service, with carriers intending to aggregate traffic in a given region into fewer gateways. Some smaller feed markets will see less capacity as 50-seat jets get retired. And as for short-haul and intra-regional O&D traffic – it’s going by automobile or via Zoom. That won’t change.

More Seats At The Gate. One key metric that will change: In 2019 the average seats per airliner in fleet was 137. At the end of next year it will be 151 seats. It is an indication of the retirement of large numbers of 50-seat jets.

Small Communities… Less Service. Not Necessarily No Service. There won’t, however be a wholesale abandonment of scheduled service at small airports. The misleading wolf calls from some industry organizations that loss of “regional airlines” will leave such communities high and dry are non-factual nonsense. There have been a few such companies go out of business, but many of the airplanes just shifted to operators. ExpressJet is going down… but many of their aircraft are now going to be operated by CommutAir.

Nevertheless, the air transportation system itself is fundamentally evolving into a different role. Changes in the economics of air travel, changes in fleet applications and consumer shifts to other communication channels are all taking place right now. Airport planning cannot just assume a return to pre-CCP-Covid days.

New Planning Is In Order. Call The #1 Aviation Forecast Team. Dust off that master plan. Even if it was done just last year, it’s focused on an aviation industry that’s no longer in place.

At Boyd Group International, we are providing our clients with a new program, Focus On The Future, that takes every business and consumer aspect at an airport, and relates them to the known and expected realities of the new emerging environment. Give us a call to discuss and get started. Assuming the past is not an option

Also, the new air transportation environment will be the subject of a pre-Summit Workshop, The Titanic Dynamic, which covers the need for anticipation, rapid response, and no reticence to accept “mathematical certainties” in air service planning.

This is not another tired discussion of “air service development” – it will be a incisive look at the new air transportation system and its role in the new communication systems, and how to recognize where new opportunities will be.

Again, just click here to register for the Summit and the pre-event Workshops.

And don’t forget to call or drop us an email to discuss scheduling your airport’s Focus On The Future program.

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FROM ALL OF US AT BOYD GROUP INTERNATIONAL, WE WISH YOU A HEALTHY AND PROSPEROUS WEEK AHEAD!

AND IN THE MIDST OF ALL THESE CHANGES, KEEP A SHARP EYE FOR NEW OPPORTUNITIES… THEY ARE THERE, WE JUST NEED TO ADJUST OUR VISION A BIT.

Monday Insight – October 26, 2020

Announcing…

Airport Success Planning In The New Environment
From Boyd Group International

Here’s a not so subtle fact or two…

Between 2021 and 2025, US airports will see 1.5 billion fewer enplanements than what was expected before the CCP-Covid pandemic.
The US airline industry will shrink in scope and fleets… today over one third of airliners are either parked or enormously under-utilized.
Changes in fleet mix with new airliner types will result in different airline market strategies.
Airline route and market planning will be based on different metrics and corporate strategies.

One thing is clear – the entire air transportation system has changed permanently. The CCP-Covid pandemic has shifted travel patterns in the economy, and has engendered material and structural changes in the entire airline industry.

Past metrics and past approaches to airport strategic planning no longer apply… airports must understand and adjust to a whole new air service environment in order to remain connected to the global economy.

That “true market study” reflects an airline system that no longer exists. That “leakage” analysis does not fit the new airline structure – or the new consumer demand trends.

The airline industry is now re-emerging, and bank on it – airports and communities need to get a clear picture of the new air transportation system to craft the programs necessary to assure maximizing air access in the new global future. Past data and past mechanisms to retain air service are just that – past.

Traditional approaches won’t apply, because the airline industry is operating on whole new metrics.

Announcing our exclusive Runway To The Future Program. It is based on this new emerging airline system. The forecast expertise of Boyd Group International will deliver a clear understanding of future consumer and airline shifts and how they impact your air service future and your airport.

Think about it – almost 1.5 billion fewer enplanements over the next five years… what effects will that have on revenues? On facility needs? On consumer patterns? Anticipating and planning is far superior to reacting to these factors.

Here’s the approach…

Runway to The Future combines a clear forecast of the emerging air transportation dynamics as they will affect your airport. This is based on Boyd Group International’s unrivaled expertise in identifying new aviation trends.

We start by imparting a clear and concise picture of the new structure of the U.S. airline industry, and then relate it to what you can expect in the future. No sugar-coating. Just the hard facts – and some will be quite positive, by the way, particularly in the area of new fleet mixes. Others will represent challenging shifts in future projections.

Section One: National Airline Trend Scenarios

The airline industry is re-structuring, driven both by consumer pattern shifts as well as due to the extensive damage done to balance sheets caused by the CCP-Covid pandemic. It’s important that your community understand the new environment and how airlines will evolve in the future

Section Two: Emerging Local Air Service Trends v Historical

Put that pre-Covid market study back on the shelf – or into the round file. It’s all about an air transportation system that no longer exists.

This is where the landing gear meets the runway. Our Runway To The Future program candidly reviews the historical trends at your airport, and relates them to what is forecast to take place in the new environment. We’ll relate current shifts in air service due to airline strategy changes, and candidly discuss how they will affect your community

Section Three: Trend Analyses & Forecast Scenarios – Short-term & Long Term

Boyd Group International is the leader in airport forecasting. Our Airports:USA® program relates all aspects of air traffic generation. The Runway To The Future program will deliver a near-term forecast – month-by-month, out one year – to gain an understanding of what can be expected as the airline industry restructures. The long-term traffic and trend forecasts what is expected over the four years beyond the short-term projections, and will discuss known and expected strategic scenarios.

We bring to bear our industry leading expertise in traffic, trend and fleet forecasts. This includes our Airports:USA forecasts – published since 1992 – and our Global Fleet Trend forecasts. These are relied upon in our global aviation projects.

We’d note that at the International Aviation Forecast Summit this month, BGI’s ten year fleet demand forecast was within 2.5% of Boeing’s. This is representative of forecast depth unrivaled by any other consulting firm, and is indicative of all our forecast activities.

Section Four: Strategic Blueprint

From these data, Boyd Group International will assist in developing and crafting your airport’s comprehensive strategic and tactical air access program. We will discuss each incumbent and potential airline within the real context of the future.

No other source can deliver this level of forecast expertise – which will cut through the hype and deliver hard facts and projections which are critical to airport planning in the new environment.

Section Five: Community Update Presentations

The Runway To The Future Program includes the delivery of a comprehensive community presentation that will outline the findings and forecasts of the project.

The format can be on-site or be provided electronically, for up to 100 attendees, and allowing robust interaction and Q&A. The goal is to bring to the fore what the community can expect in the near term and how individuals can rally behind the airport in these tough times as well as in the future.

A Complete Future Vision For Your Airport – Based Professional Analyses

The Runway To The Future Program includes comprehensive data and analyses that will give an independent perspective from the leader in aviation trend forecasting – Boyd Group International.

Don’t wait… the future is now different… Your planning needs to be so, also.

Click here to get the discussion started. Or give us a call at 303 674 2000. We’re ready.

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Monday Insight – September 21, 2020

Impulse Air Cargo – The Next Trend In Logistics

Time is the new major cost component of 21st century business.

The old adage that “time is money” is coming into its own in communications and distribution.

Just as new electronic modes of transferring data and information have decimated much of what was once vibrant intra-regional and short-haul passenger volume, the new imperative of speed and accuracy in logistics are going to propel a new dynamic in air cargo. The value of time is increasing rapidly in all aspects of global and domestic business.

At the 25th International Aviation Forecast Summit, October 11-13, we’ll be discussing the the coming explosion in the role and importance of air cargo transportation in the USA and across the globe

For the first time in history, the role of air cargo as a key logistics modality is breaking out of its traditional role of carrying traditional specific high-value, time sensitive categories of goods.

Regardless of the sector – in the next five years, the role of air freight as part of our communications system will expand. Airports that understand and anticipate this will be in line for some entirely new traffic.

This is despite the fact that air logistics are much more expensive than surface modes. That’s a value-factor that’s changing… reason? Time value is the new imperative in global and domestic trade.

Take it to the bank… the emerging key component of the future communication channels will be time-value. It is now staring to eclipse the natural higher expense of levitating things in airplanes to get from point A to point B. It is going to affect all sectors of air cargo.

Along With This, The Emergence of A New Air Cargo Genre. Anyone who took Marketing 101 knows what an “impulse item” is. It’s products that are positioned to get the consumer to buy it, as the term indicates, on impulse.

They see it and find it’s really easy to reach out and get it. Typically these are items found, for example, along check-out counters at supermarkets. It takes no effort or hassle to just reach out and grab that candy, or whatever else is there. Quick decision, quick gratification.

Today, Amazon has turned much of the entire retail business into a sea of “impulse items.” Now, it’s easy to just go on line, hit a couple of keystrokes, and voila! the item is on its way for delivery as fast as tomorrow – which is competitive or better than going to the mall and all the hassle. Because it’s easy – even if it’s a couple days delivery – the access to the product is just like at the supermarket check out counter… ‘Cept it’s for millions of items.

The economics created by the sheer volume of sales is increasingly supportive of air transportation. Historically, shipping things by air was relegated to high-value items that demanded fast transport from manufacture to end-use. The Amazon model delivers huge volumes of mostly small items, and increasingly they can be aggregated into flights focused on customer deliveries to specific geographic areas.

Now, add to this the increased value of time in all communication channels, and air cargo – in a number of formats, not just the impulse sector – will become far more important

Recipe: A 737-Capable Runway. A Secure Ramp. Good Surface Access to Final Users. This impulse model opens up dozens of U.S. airports to substantial new opportunities. This includes those with no current passenger service. Actually, these airports may have an advantage. The Amazon impulse air cargo model is likely to expand – and beyond just Amazon, and also in various iterations of the approach. But so are other sectors of air cargo. Air logistics represent speed… and time reduction will be an increasing part of what will make a lot of commodities more competitive.

The message is clear: air cargo is fixin’ to launch beyond its traditional barriers. At the International Aviation Forecast Summit, October 11-13 at Cincinnati USA, we will have presentations from senior executives from Atlas Air and DHL. These are cutting-edge companies that have some new ideas on where the business of transferring goods by air – including across the globe – will be evolving. Get the straight facts and perspectives – and get ahead of the competition.

If you haven’t registered yet, click here to go to the IAFS website and to reserve your space. And take a look at the agenda, too – when this event wraps up, you’ll have a much clearer perspective of the new aviation industry.

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The Airport & Airline Industries Need To Start Swinging Back

More Bogus CCP-Covid Reports On “Dangers” of Air Travel

Does anybody actually question the stuff that gets reported about air travel and the CCP-Covid pandemic?

It doesn’t seem like it, particularly if it might counter herd thinking and political-correctness.

Every Famous Person Is Now An Expert. It seems that just about anything that any semi-sober source puts out about the disease is taken at face value – whether it’s from a medical laboratory someplace in England that turns out to have three employees and zero experience, a questionable and obvious ax-grinding “expert” on one network or another referencing “unnamed” sources, an industrialist whose claim to fame has zip to do with medical issues, or the second-runner-up for worst actor at the Oscars.

All have credibility, apparently.

Airline Cabins Designed By Typhoid Mary. Just in the past couple of weeks, more panting stories have come out about how the disease can be transmitted easily in an airplane cabin.

It’s the latest news, don’t ya know, notwithstanding they were from research on just a couple of flights that parked at the gate almost six months ago, when none of the current and extensive sanitation precautions had been implemented.

These jive reports tag on to the misleading CDC report of about a month ago, regarding how they implied that an airliner cabin was the equivalent of a giant Petri dish. They took data from two flights… just two. They didn’t note clearly that these flights – again, six months ago – were both charters evacuating people from highly-infected areas in Italy back to Korea.

But, like good little politically-correct sheep, that critical point was missed in regard to the value of the CDC report as a news story.

The latest reports – one from research in Vietnam, even – advises us that CCP-Corona-19 can be spread on long-haul flights. They actually reviewed and tracked passengers on two flights between Europe and Asia.

But these, too, were flights that took place in March. And they’re reporting it now, as if it’s current data, implying that it is relevant to the current state of air travel.

When These Flights Operated, The Politicians Were Denouncing Claims of Contagion. Back then, not only were there no precautions anywhere near the now-increased (and, hyper) sanitation at airports and airlines, but take a gander at what our own politicians were telling us at the same time about the CCP-Covid disease.

To put these “reports” in context, these supposed red-flag flights took place at a time frame when the Mayor of New York was telling folks not to worry, as the disease wasn’t airborne-communicated, and the city was in great shape to handle the situation. Out West, the speaker of the House of Representatives was doing photo-ops, almost shaming people for not participating in festivities on the streets of San Francisco.

The point is that “studies” of the vulnerability of air travel to the CCP-Covid disease from March and earlier are completely inaccurate when comparing it with air travel is today.

Spit Out Numbers – And Provide No Context. It’s More Exciting That Way. Then there was a recent statistic that since March, the TSA reports that 1,875 TSA staff have been infected, noting that most were screeners. Yup, that’s because most TSA staff are screeners.

Other referenced data is that the TSA currently has 215 CCP-Covid infected employees (out of that 1,875) with the inference that the infection rate makes working at the Transportation Security Administration nearly as dangerous as inviting a family of crocodiles over for cocktails.

Does anybody even try to put these numbers into context? That number of currently-infected staff – 215 – represents three tenths of one percent of all TSA employees, and there is the dishonest inference in some of these outside “reports” that they only could have gotten it on the job. There are probably a lot more lost work hours due to occupational injuries or other day-to-day maladies, than what’s being inflicted by the CCP-Covid pandemic.

Got Some Notoriety? You’re A CCP-Covid Expert. The problem that the airline industry faces is the current swirl of supposed “expert” information, coming from all directions.

Last week, Bill Gates – obviously an expert in disease transmission and what went on at the Wuhan Virology facility and elsewhere in China – announced that that the prohibition of China-U.S. traffic actually helped spread the disease. His opinion, with zero attempt to question the assumptions, has been published as if it came direct from Zeus’s chiropractor on Mount Olympus.

No questions asked, the media just reported it. It came from Bill Gates, right?

Political Correctness Is Very Expensive. If we are to get air traffic volume to mirror the rest of the national recovery, the airport industry and the airline industry need to fill this information void, and come back like lightning when misinformation such these on-board infection reports come out.

It makes no difference if they come from the CDC, or a lab in some far-off country, or actors and philanthropists spouting off on subjects they know little about.

Aviation industry organizations need to swing back when misinformation is taken as fact.

At this point, that’s going to be a lot of punches that need to be thrown, and it likely will offend some folks.

Tough. This is business.

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Monday Insight – September 14, 2020

Before we start…

International Aviation Forecast Summit
Shaping Up To Be Largest Yet!

We are excited at the registrations – on-site and virtual – coming in for the 25th IAFS.

This will be the first major live aviation event since the Covid pandemic was delivered to the U.S. And it will be the event that really does explore the future – as is, where-is. For those who still are travel-restricted, there’s a virtual option. But being there is the real deal. Cincinnati USA, October 11-13.

There are wrenching changes continuing to evolve in aviation, and the IAFS will have the industry leaders there, ready to discuss the future. At Boyd Group International, we understand that change is just another word for “opportunity,” and that will be the theme of the Summit.

If you haven’t registered yet, click here to see the agenda and the pre-Summit Workshop program. Then register!

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Industry Events…

Delta has retired the last of its 737-700s, somewhat simplifying its fleet.

Southwest was reported to park last week an additional seven 737-700s, and restore to flying status 41 more that had been stored. Fleet-flipping in the right direction.

American is shifting the focus of Asian operations to DFW, instead of LAX. A very smart move. LAX has traditionally had strong local Asian O&D, but is in a very poor geographic location for connect traffic from the rest of the USA. AA can better connect traffic from the US Deep South and from Latin America over DFW.

The shift is entirely consistent with the imperatives of the new air transportation system… anticipating the future and moving accordingly. BGI’s Airports:China forecasts indicate that US-China O&D – a major part of the LAX base – will plummet from 8.2 million in 2019 to – at best – 1.1 million in 2021 and beyond. Ignore the veneer reports that the Chinese economy and air traffic are rebounding. They are not. The AA DFW hub is a much more productive gateway than LAX. Besides, the main core of the LAX-Asia traffic was China, and it’s dead as a dodo.

This runs counter to the drivel coming out of China from traditional media. Keep in mind that no reports originated in China, even by U.S. media, can be fully trusted. One headline that displeases the unelected thugs in the CCP, and your native reporters either disappear or are harassed and American staff are tossed out of the country. This does affect the type of reporting that’s published.

Leisure Traffic Growth... the unknown at this moment is how consumers will in the future define “disposable income.” Plus, the willy-nilly, come and go “quarantines” that some states put into effect are also unknowns that will keep people home.

Enplanement Forecasts – 2021. Our Airports:USA forecasts are being restructured to address the volatility in airline capacity scheduling. One major factor will be close monitoring of fleet shifts. In the next 18 months, it won’t be regional “demand” that will determine traffic volume, but instead the capacity that airlines choose to produce.

This means that traditional ways of predicting traffic levels can no longer rely on past history. At the IAFS, we’re holding a special Workshop to explore the new airport planning dynamics. It’s called Titanic Dynamics, and it explores how to deal with the new factors in air service access.

That scraping sound in the ASD world really was an iceberg. Click here for details. Then register for the IAFS.

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FROM ALL OF US AT BOYD GROUP INTERNATIONAL – OUR WISHES FOR A GREAT WEEK AHEAD!
REMEMBER… THIS IS A PERIOD OF CHANGE – AND CHANGE ALWAYS BRINGS OPPORTUNITY TO BREAK FROM THE PAST.

Monday Insight – September 8, 2020

Before we start…

Agenda now posted for the International Aviation Forecast Summit.

Take a look – this will be the event that gets down to the bedrock of the challenges facing all areas of aviation in the post-CCP-Covid world.

The executives and CEOs at the IAFS are the people who will be shaping the new future. Hard facts. Direct perspectives. Plus forecasts of fleets, trends and our Airports:USA trend and traffic forecasts.

Clear your calendar. Get into one of the safest environments available – air travel – and join us in Cincinnati USA October 11-13.

Click here to see the agenda and to register.
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October 1 – Will The Trigger Get Pulled?

There is no point in sugarcoating it.

If there is no further support for the airline industry coming from the House of Reprobates in Washington, the airline industry on October 1 will enter into the most fundamental structural change since deregulation.

Once the estimated 70,000+ airline staff are furloughed, it will trigger major restructuring of the air transportation system, most of which will not be temporary. This will not just be pink slips, but the start of a new foundation for the airline business. One that is much smaller and less comprehensive than a year ago.

It will portend the following:

The “rebound” will be attained much sooner. Yes, sooner. Because the “rebound to normal” will be a much smaller air transportation system. The economy is coming back. But with the structural changes in the airline industry that October 1 may bring, the “new normal” will be an airline industry that’s very different from what it was before the Chinese CCP inflicted this pandemic on the world.

More regionalization of air access. The incremental revenues from metro-peripheral airports will be less accessible and have less value when airlines will be operating fleets that will be 25%-35% smaller. Bank on it.

Small community air service reduced. Because of what will be major fleet shifts, there will be pull-backs in service to smaller airports. This does not necessarily mean that all of the communities affected will lose access to the air transportation system, but the drive to a larger airport will be a new part of the itinerary.

Support industries hammered. Today, we are seeing a lot of “fleet-flipping.”

It’s where airlines are taking some operating aircraft and swapping them with ones previously parked. This is mostly due to the operating units coming up for maintenance, and replacing them with ones that have more time on whatever the components may be. If a component is running out of time or cycles, an aircraft on the ground can be swapped.

That means overhaul and maintenance support facilities will be seeing a major downturn in business – both independent companies as well as airline in-house operations. C-checks and D-checks cancelled, as well as component overhauls. A lot of jobs.

It Need Not Happen. But If It Does, It Won’t Be Pleasant. What this lack of support from Congress means is that the airline industry will have no alternative but to completely restructure in a manner that cannot be quickly rebuilt. If airlines can get another 6-9 months of relief as the economy returns, and some common sense and honesty gets injected into the rigged numbers game that is driving the pandmic-panic, the rebound will be to a system similar to that of 2019.

If not, think of it as being a whole new industry.
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China Scores A Direct Hit On Plattsburgh

The North Country of New York has just taken one down the economic stack, courtesy of the criminals in Beijing.

Spirit Airlines has announced it is pulling service from Plattsburgh. Reason? A substantial part of the traffic base was vacationers from Quebec. In effect, Plattsburgh was the leisure gateway for Montreal. Cheaper fares and far less travel taxes.

But because of the CCP-Corona disease, the border is closed between the USA and Canada. Poof! No traffic. There simply isn’t enough population along the US Route 11 corridor to support flights to Florida.

Make no mistake. This pandemic – and the near-stampede panic it has generated across the world – was foisted on us by the thugs running China. That is not hyperbole – it is fact. The Chinese government covered it up and in effect encouraged the spread of the virus.

We strongly are urging communities and airports to take stock in the financial damage done by this pandemic. Some of our politicians are quite content to give China a walk – some are likely connected with business dealings there. But others are focused on doing all possible to get recompense from the unelected Chinese Communist Party – which has billions in assets, both here and in China.

If you want some hard facts on how the CCP intentionally allowed the virus spread, click onto our Aviation Unscripted Youtube channel and invest 14 minutes on our posted video on the subject.
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FROM ALL OF US AT BOYD GROUP INTERNATIONAL – OUR WISHES FOR A GREAT WEEK AHEAD!
REMEMBER… THIS IS A PERIOD OF CHANGE – AND CHANGE ALWAYS BRINGS OPPORTUNITY TO BREAK FROM THE PAST.

Monday Insight – August 31, 2020

Before We Start This Week…

United Airlines Gets Service-Aggressive

Last week’s Monday Insight outlined the need for airlines to respond to the new competition from other modes of communication.

We noted that the rules, systems and policies of the pre-China/CCP Covid era needed to evolve to make doing business easier for the customer due to inroads being made by electronic channels.

United has done just that. Big time.

Effective immediately, the airline has done away with change fees “for good.” For consumers, this is huge, not having to be in terror of calling reservations to change a flight, and hear the melodious message that another $200 bucks is gone. This is not a minor service move.

Aggressive. It makes flying United a lot less anxiety-prone, and anxiety simply makes consumers fear airlines.

Let’s see what the rest of the industry does. Southwest’s secret – no fees that actually increase customer loyalty and future business – is being discovered.

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The Enemy Is Now Official Misinformation,
Not Just The China/CCP Covid Disease

Durable goods orders up 11%. Housing starts at or near an all-time high. The stock market heading for records. Employment returning.

Yet air travel demand is going flat as a tortilla. American Airlines, for example, has announced that its October schedule will be just 55% of what it was a year ago.

Sumpthin’s not right here… with the economic rebound, air travel demand should be running apace. There is something that’s keeping people home.

It’s fear, where it should not exist. Artificial fear.

There’s a reason: the public is being fed lots of bad – sometimes intentionally bad – misinformation regarding the safety of air travel in the United States. Airliner cabins are being painted as potential disease bins, when just the opposite is true.

Say Thanks To The CDC. The latest attack on air service is a completely jive-time “report” by the CDC regarding the potential of being infected with the China/CCP Covid disease in an airplane cabin. We will be straight: what they put out is at least constructively, if not intentionally, a lie in regard to the safety of the U.S. air transportation industry. A lie.

Not that they went all out in regard to efforts. They “researched” two flights. Two. And not typical ones, either.

Then they came up with headlines that have helped destroy the rebound in air traffic in America. “Airline cabins can spread Covid…”

Bad Data. Bad Comparisons. Sloppy Reporting. Based on their “suspicions” – yup, suspicions – in analyzing people who were on these two – count them again, two – flights, the CDC has let loose the news that their hard work has discovered that this gift from the China CCP can be transmitted in the cabin of an airplane. Any airplane. Any circumstances. No full discussion.

That, then, has been taken by the media as the final word that flying on scheduled flights represents playing Russian roulette with your health.

Two flights. And worse, two flights back in March. And worse again, two flights that were charters specifically evacuating people who had been exposed to the China/Covid disease from an infected area in Italy, back to South Korea.

And like good little sheep we should accept their word, right? The media sure lapped it up.

Today, U.S. airports and airlines have implemented comprehensive and effective programs to sanitize facilities and aircraft. Therefore, those two flights the CDC “studied” are not germane to what is going on in the real world. Unfortunately, this context was left out of the story.

Wonder why they don’t go back and do an analysis of Noah’s Ark, too. Maybe the giraffes had symptoms. That would be just as irrelevant to today’s air transportation system as their dimbulb “study.”

This CDC report bears no relationship to the air transportation system at all. None. In that regard, the conclusion is a lie and one that has misled the American public.

One has to wonder what their motives really are.

Let’s hit it again, just to be clear: The CDC “study” was based on just two flights back in March, repatriating people from Covid-infected areas in the E.U. back to South Korea – charters specifically for that purpose, carrying that specific category of traveler. The passengers were all traveling specifically to escape from a region in which they had been exposed to the China/CCP disease.

That’s not the same as flights today between Sacramento and Seattle, or San Antonio to Atlanta. Totally different situations, different traffic sectors, and – critically – completely different measures now taken in regard to safe and sanitized air travel.

Creating A False Picture of Air Travel. After all of the effective work accomplished by airports and airlines in the USA, these incompetent clowns at the CDC have polluted the truth about air travel. And have directly caused people to lose their employment. We have to ask if they have some sort of political intentions with this type of dishonest slanting of the truth.

The fine hoodlums at the helm in Beijing who brought us this pandemic should be smiling broadly.

Just Because It’s From “Experts,” It’s Not Always Accurate. This is just another indication that we’re on our own in determining the truth.

Remember, the “experts” we were told to trust back when all this started (and as a separate sidebar for all the university professors out there who threaten students for telling the truth, it started in China) was the World Health Organization, which has now been proven to be a pack of political bozos. The rest of the “expert opinions” that come out from time to time must now be questioned and not taken at face value.

So, for those airports and communities that are being hurt by a slow rebound in air travel, be aware that a lot of it is an inside job due to entities like the CDC.

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Monday Insight – August 24, 2020

The Unseen Airline Industry Crisis

Changes. Disruption.

Pretty much describes the situation facing the U.S. airline industry. Except one other dynamic that hasn’t yet fully been grasped or even identified…

Evolution… evolution within the range of competing communication channels. The airline business is not excluded from the need to evolve or atrophy and die.

Air transportation is a communication channel. And communication channels have been completely disrupted by the response to the China pandemic. Air travel has been choked, forcing use of other channels in the day to day inter-communication of business, government and private citizens.

The surprise coming is that a substantial number of these former alternatives will not be temporary, and the world is finding that some of them are actually simpler and easier than air travel.

Think about it. We have been forced into using electronic communication. Many of those modalities are a lot simpler than the traditional air transportation process. They cannot fill the entire role that air service occupies, but it can snarf a part of it.

In short, other modes of communication have evolved. The process of air transportation has not.

The Evolution Started Long Before The Pandemic – But Now It’s In High Gear. At BGI, we’ve already covered in our air service work how alternative modes of communication have permanently replaced and supplanted air travel in many short-haul O&D and rural markets.

It’s too slow compared to other ways of getting business done, and too much hassle.

Today, air transportation faces a wider challenge from electronic means of communication. True, there never will be a replacement for most of the need for face-to-face interaction, both business and private. One cannot get a sunburn and run on the beach electronically. A billion-dollar business deal isn’t going to be done via Skype.

But at the margins of the demand spectrum, consumers are finding that the process – the physical actions needed to use scheduled air service – are increasingly onerous, and they will – will – in the future stick to a degree with what they’ve found over the last four months – electronic communication has no refund rules. No rebooking fees. No need to be concerned with fine print.

Other forms of communication have evolved to be easier and faster and more convenient. The process of air travel fundamentally has not. Sure, there’s now electronic ticketing and boarding passes and really great apps from most airlines. But nevertheless, the range of hurdles and potential hurdles that consumers need to navigate have not materially changed.

Make A Mistake & Pay For It. To be very clear, air travel demands a certain amount of process, just for safety and security. But there is no “process anxiety” with electronic communication. Make a mistake and there are unlimited Mulligans. In air travel, the process over the years has become accessorized with all manner of additional airline-developed rules, regulations, fees and processes that can represent financial hit should the customer fail to comply for any reason.

Airlines have the right to charge for their services. They have the right to require customers do business a certain way in regard to things like ticketing, baggage and itinerary changes. It is their right.

But the question needs to be asked: what is the public perception in general about the customer orientation of airlines? Regardless of the fact – and it is a fact – that virtually all U.S. airlines are focused on customer service more than ever (actually, some are flat-out excellent), the perception of the public doesn’t reflect this.

The main reason is the complexity of the process. The anxiety of being penalized for missing a rule. The difficulty – represented by penalties and fees – of making the decision on when to fly.

Then there is the ironclad enforcement of rules. Like the tacit contention that buying a ticket is somehow the customer’s contractual commitment to taking a trip, even when weather precludes the airline from delivering on the date promised.

“You are now permitted to re-book, without penalty, within 10 days, as long as it is on the same itinerary and on the same fare basis, blah blah blah…”

Really? Air travel is all about time-certain need to be somewhere. A weather or mechanical or ATC event that precludes the airline from flying is a given from time to time – it’s an intrinsic part of the business. But for the folks who made the reservation, thinking that they would get to the destination as scheduled, it’s not that simple. The wedding is now over. Grandma’s funeral was held anyway. The big meeting was missed. The cruise ship sailed.

But the money the customer paid to get to these events is not to be easily refunded. You committed to a trip to Omaha, pal. Period.

The airport and cabin staff can deliver incredible customer service, only to have it all torpedoed with one condescending form letter from the refund department, usually buttressed with an attachment of some rule or an excerpt from the contract of carriage. Or one saccharine-stupid machine-generated “tough, but it’s our rules” email from what is passed off as the customer care department.

Here’s the bottom line. The airline industry is not just facing the damage done by the China-Covid pandemic. It is now facing increased competition from other forms of communication that consumers are finding to be a lot easier to use. Yup, it may just represent a single digit percentage of traffic, but that’s also a big chunk of the profit margin.

Point: The airline industry needs to look at procedurally evolving to better compete with these pesky new forms of competition.

Monday Insight – August 17, 2020

Getting A Grip On Air Access Realities For The Post-China/CCP Covid Epoch

Small Community Air Access Planning Needs To Wake Up To The 21^st Century

“…As of 2018, 63% of U.S. airports with scheduled commercial flights were served only by regional carriers, according to the RAA…”

Yikes.

Sleeping Beauty just woke up, apparently, and has no idea of what’s happened during her slumber.

It’s time we all get a grip on the raw realities of the air transportation system… and recognize that the entire economic and consumer underpinnings of airline operations have completely changed in the past 30 years.

The statement from the Regional Airline Association is accurate only to the extent as to which certificated carrier may have pilots the controls of the aircraft. Beyond that, it’s not particularly accurate in the message it implies, which is mainly that it’s “regional airlines” serving these airports. Not accurate.

The Term “Regional Airlines” Is More Than Just Obsolete. It’s very misleading to imply that there is still a separate industry of “regional” airlines that are independently in business, with route systems focused on connecting smaller communities to the air transportation system.

That structure has been stone cold dead for three decades. But because of the continued use of the term, a lot of the media and thin-brained members of congress are clueless. Or have been blissfully asleep for the last two dozen or more years.

The is no independent “regional airline” system, anymore. Most of those in operation are neither regional nor airline brands. They are leasing companies, in effect. They lease crews and the operation of smaller airliners to major carriers.

In point of fact, in the lower 48, there are very few small airlines with any semblance of an independent route system. The main “regional airlines” of yore are now mainly in the business of providing aircraft to major carrier systems, give or take a few EAS markets. They don’t make the decisions on where they will operate… they don’t book passengers… they don’t directly collect fares… their major carrier customer does that. In that regard, it’s not much different from airplanes the airline gets from traditional leasing companies.

The next-tier-down independent airlines such as Boutique and Southern Air Express are not geographically-focused but are in the business mainly of operating government subsidized routes across the country.

So, in point of fact, most of the airports referred to in the RAA quote are actually served by major carriers – AA, DL, AS and UA – using the parts of their fleet that fit the mission. The other implications, such as the contention that corporate demise of some of these operators will deprive small communities of air service, are completely nonsense.

It is a matter of market viability to the major airline system. If a small market has economic value to American or Delta or United or Alaska, they will fly there… period. There won’t be any shortage of small aircraft lift to do so if, unfortunately, one or more of the corporations now operating them cease to do business.

Proposed Federal Support – Is It Really For Air Service… Or A Leasing Company? Another touchy issue is federal support – CARES type – for these entities. Since their revenue streams come almost completely from the large carriers to which they are under contract to lease aircraft, federal support would be difficult to justify, particularly in situations where the declining economics of 50-seat jets make the aircraft un-economic to the major carrier, and which in the future may not want them. United has done so… Delta ditto.

With a shrinking post-China/Covid air transportation system, how long would this support need to last before it became apparent that the aircraft involved no longer had any market need?

Would this mean that other companies in the business of leasing aircraft to major carriers – such as ILFC and Airlease – should be in line for government support as well?

Bottom line: The days of trying to recreate the past, with EAS subsidies and Small Community Air Service Grant programs that mainly delivered results for airports hardly “small” – are over. The misconception that we have a vibrant independent “regional airline” system only gets in the way of recognizing the evolving air transportation system in America.

The U.S. air transportation system will recover, but it will do so within the context of the new economic structure that emerges from the massive damage done by the China pandemic.

And all the king’s horses and all the king’s leakage studies won’t bring the good old days back.

It will not resemble that of 2019, let alone 1980, which it seems is the fantasy goal of a lot of misguided air service planning.

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Want Straight Talk, And Clear Perceptions of Aviation’s Future?

Join us at the International Aviation Forecast Summit.

Just like the above, this entire event is based on clear data and unvarnished facts.

The executives that will be shaping the future will be there, from the airline industry, the aircraft industry, suppliers, and airports. In addition, there will be direct and clear forecasts of the new, post-China Covid air transportation system. No sugar coating.

October 11-13… if you haven’t registered, click here and do so.

We look forward to seeing you!